Power price positive step but big issues remain

Sugarcane farmers’ group CANEGROWERS has welcomed as a win a new option to help Queensland irrigators manage high electricity costs but says more work is needed to fix all the issues in the power pricing system.

“The confirmation from the Queensland Competition Authority that a new control load tariff, called T34, will be available as a primary tariff to farmers from 1 November is a victory for irrigators and comes on the back of years of lobbying from CANEGROWERS and other farm groups,” CANEGROWERS CEO Dan Galligan said.

“I urge growers to carefully assess if T34 is right for them to ensure their business can benefit from a lower price for power but also not be affected by the risk of service delivery interruptions.”

CANEGROWERS is calling for the parties campaigning in the Queensland State Election to commit to a suite of agricultural electricity tariffs capped at 16c/kWh. T34 is close to that mark with a usage charge of 17.295 c/kWh and a daily fixed change of $1.18081 per day (both ex-GST).

Bundaberg grower Mark Pressler was part of a joint trial of the control load tariff run by CANEGROWERS and Energy Queensland and says he was impressed.

“The tariff delivered some worthwhile cost savings for my business and the service interruptions were manageable,” he said. “I’m looking forward to Ergon finalising its plan to send us text notifications so we know ahead of time when the power might be cut.”

While T34 is a positive step, Mr Galligan said it was not the solution to all of the problems with electricity pricing and CANEGROWERS would continue to campaign for an end to network gold plating practices and profit gouging by governments.

“Significantly more change is still needed to the electricity pricing system and we are calling on the Labor and Liberal National parties to commit to more action to improve affordability for farmers after the 31 October election,” Mr Galligan said.

“Successive Queensland Governments have used the electricity network as a cash cow and a form of farm business taxation by pulling out dividends worth up to $1.5 billion each year.

“Power companies have also been rewarded for overcapitalising on the network, what’s known as gold-plating. The network charge is about half of a power bill so when this goes up, profit margin of irrigators gets squeezed.

“Both of these systemic issues are yet to be addressed but if they are, and we see significant price cuts for irrigators across the board, production on farms will increase.”

The CANEGROWERS State Election 8-point plan lists the high costs of electricity and water as one of the obstacles holding the Queensland sugarcane industry back from realising its full potential.

Media comment: Dan Galligan | CANEGROWERS CEO | 0429 707 809

More information: Neroli Roocke | CANEGROWERS Communications | 0418 871 881

Note: The QCA has found indicative annual savings for typical users moving to T34 from other irrigation tariffs of:

$768 moving from T62

$1,116 moving from T65

$2,487 moving from T66

Supplementary review: Regulated retail electricity prices 2020–21

New T34 electricity tariff cuts irrigation costs

Farmers say a newly announced electricity tariff will help irrigators better manage high energy costs, but says more work is needed to fix all the issues in the power pricing system.

The Queensland Competition Authority confirmed this week that the new control load tariff T34 would be available as a primary tariff to farmers from November 1.

QCA found indicative annual savings for typical users moving to T34 from other irrigation tariffs of: $768 moving from T62; $1116 moving from T65; and $2487 moving from T66.

CANEGROWERS chief executive officer Dan Galligan said the announcement came on the back of years of lobbying from CANEGROWERS and other farm groups.

“I urge growers to carefully assess if T34 is right for them to ensure their business can benefit from a lower price for power but also not be affected by the risk of service delivery interruptions,” he said.

Mr Galligan said in the run-up to the October 31 state election, all political parties needed to commit to a suite of agricultural electricity tariffs capped at 16c/kWh. T34 is close to that mark with a usage charge of 17.295 c/kWh and a daily fixed change of $1.18081/day (both ex-GST).

Bundaberg grower Mark Pressler he was impressed by joint trial of the control load tariff run by CANEGROWERS and Energy Queensland.

“The tariff delivered some worthwhile cost savings for my business and the service interruptions were manageable,” Mr Pressler said.

“I’m looking forward to Ergon finalising its plan to send us text notifications so we know ahead of time when the power might be cut.”

While T34 is a positive step, Mr Galligan said it was not the solution to all of the problems with electricity pricing and CANEGROWERS would continue to campaign for an end to network gold plating practices and profit gouging by governments.

“Significantly more change is still needed to the electricity pricing system and we are calling on the Labor and Liberal National parties to commit to more action to improve affordability for farmers,” Mr Galligan said.

“Successive Queensland Governments have used the electricity network as a cash cow and a form of farm business taxation by pulling out dividends worth up to $1.5 billion each year.

“Power companies have also been rewarded for overcapitalising on the network, what’s known as gold-plating. The network charge is about half of a power bill so when this goes up, profit margin of irrigators gets squeezed.

“Both of these systemic issues are yet to be addressed but if they are, and we see significant price cuts for irrigators across the board, production on farms will increase.”

CANEGROWERS State Election 8-point plan lists the high costs of electricity and water as one of the obstacles holding the Queensland sugarcane industry back from realising its full potential.

Research targets bigger profits for canegrowers

Sugarcane growers in the Bundaberg region could soon be increasing their productivity and profitability thanks to researchers from the University of Southern Queensland.

After a bittersweet start to the year – with farmers batting drought and heavy rain – irrigation experts are teaming up with locals to help produce bigger yields.

It’s part of the Australian Government’s Smarter Irrigation for Profit (Phase 2) project, tackling some of Australia’s water issues.

University of Southern Queensland project lead Michael Scobie is encouraging anyone in the sugar industry looking to refine their skills to get involved.

He’s working with a range of experts to develop the skills and capacity of local extension and service providers which will ultimately help farmers produce more cane.

“As crushing season nears nearing its end, now is the perfect time for people to upskill,” Mr Scobie said.

“From consultants to extension officers, individuals work one-on-one with our researchers to develop their skills.

“Whether it’s assessing pumps and irrigation systems, developing new technologies or implementing better strategies to reduce water loss, it’ll mean delivering bigger profits for sugarcane growers.

“Improving irrigation and water management on the farm, is one key approach to making sure that the industry remains vibrant and viable.”

There are about 3000 canegrowers in Queensland with the industry estimated to be worth more than $2 billion.

To find out more about theSmarter Irrigation for Profit (Phase 2), visit here.

On-farm Emergency Water Infrastructure Rebate Scheme

On 2 October 2020, the Australian Government announced an additional $50 million of funding for the expansion of the On-farm Emergency Water Infrastructure Rebate Scheme in 2020-21.The roll-out of the expanded Scheme is currently being negotiated with all states and territories, including co-funding arrangements. Read the Minister’s announcement – Joint media release: $50 million boost to successful drought water infrastructure rebate.

Rebates for on-farm water infrastructure expenses. Helping primary producers and horticulture farmers in drought-affected areas.

$50 million over 3 years. Starting in 2018-19 financial year.

Access rebates

State and territory governments administer and deliver the rebates. Rebates for primary producers and horticulture farmers are now available in all states and territories.

Who can apply

You must be:

  • a primary producer or horticulture farmer (as defined by your state or territory)
  • a property owner, share farmer or lease holder
  • in an area defined as drought affected (by your state or territory)
  • in the grazing or horticulture industries.

Eligible expenses

Your new infrastructure must:

  • be for grazing livestock or permanent plantings that you own (rebates do not apply to agisted stock)
  • be for an animal welfare or permanent planting need
  • improve your drought resilience.

Eligible expenses for primary producers must relate to:

  • buying and installing
    • pipes
    • water storage devices such as tanks and troughs associated with stock watering
    • water pumps and associated electronic systems to manage water delivery
  • desilting dams
  • drilling new stock water bores and associated power supply such as generators.

Water infrastructure to support livestock watering must be purchased after 30 June 2018.

Eligible expenses for horticulture farmers must relate to:

  • desilting dams
  • drilling new groundwater bores and associated power supply such as generators.

Water infrastructure to support permanent plantings must be purchased after 30 June 2019.

Rebates will be 25 per cent of the costs for eligible expenses or up to a maximum amount agreed by the implementing state.

Benefits

Improving on-farm water supply will:

  • address animal welfare and permanent planting needs
  • help primary producers and horticulture farmers to be more resilient for future droughts
  • increase productivity for primary producers
  • mitigate degradation of natural watering points.

More funding

You may also be eligible to apply for funding through the Water Efficiency Program.

Funding for on-farm projects in the Murray–Darling Basin is available in New South Wales, Victoria, Queensland, South Australia and the Australian Capital Territory.

Burdekin voters concerned about irrigation water pricing

Irrigation water pricing is shaping up to a big issue on voting day for farmers in the marginal electorate of Burdekin.

The Australian Sugar Milling Council commissioned a poll of 537 voters in the electorate, conducted late last week, which found three-quarters of voters agree the state government should reduce irrigation water charges to boost the sugar industry.

The poll also found 75 per cent of voters felt the government should, where possible, reduce costs imposed on the sector, including reducing water charges to support local jobs.

ASMC chief executive officer David Pietsch said the poll clearly demonstrated the views of people working and living in regional Queensland and their support for the sector.

“It’s gratifying to see the strong support for the sugar industry and the recognition of the role we can play,” Mr Pietsch said.

“The poll found 78pc of voters surveyed agreed the sugar industry is important to the state’s recovery from the COVID downturn.

“Whether they are working in the sector or not, regional Queenslanders know that a strong sugar industry provides jobs and underpins local communities.

“The sugar industry generates $4 billion for the economy – a contribution that means a lot to the 23,000 Queenslanders who depend on the sector, either directly or indirectly, to support themselves and their families.”

Mr Pietsch said ASMC had been working with all political parties to secure commitments to reduce irrigation charges.

He said independent research commissioned by ASMC showed a 25pc reduction in water charges over four years would deliver up to $220 million in community benefit and a net increase of 140 jobs.

“The Liberal National Party and Katter’s Australian Party have already committed to water charge reductions, while Labor is considering our proposal for a 25pc reduction in water charges over four years,” he said.

“Water charges have increased on average 4pc every year for the last 10 years.

“In May, the Queensland government announced it would freeze water charges for 12 months, but left the door open to further increases over the following three years.”

The seat of Burdekin is held by the LNP’s Dale Last by 467 votes.

Speak now: Farmers asked about Burdekin water

North Queensland farmers are being asked what water they need to grow their businesses and jobs as part of the business case for raising the Burdekin Falls Dam.

Building Queensland and Sunwater kicked off a 30-minute online survey today.

Natural Resources Minister Dr Anthony Lynham said the survey was critical to determining how much water was required to meet future demand – essential information for the wall-raising.

“Queensland has an economic plan for post COVID recovery, and it is built on our traditional strengths like agriculture,” he said.

“The plan prioritises growing our regions and supporting the agriculture sector to drive economic prosperity.

“Water supply security can translate to more farm businesses, higher intensity farming and increased production – which in turn fosters more jobs.

Member for Townsville Scott Stewart encouraged NQ farmers to complete the survey.

“I encourage current and potential water users to contribute, particularly anyone who is looking at potentially expanding or changing operations,” he said.

“Your input will help establish how much water is needed, and that’s critical for decisions about the dam wall, and our region’s economic future.

“The Government has invested $1.2 billion in water infrastructure since 2017, including $30 million into Big Rocks Weir in the North and an expert panel to examine a potential Bradfield-style scheme.

“The Burdekin Falls Dam raising is the next big cab off the rank for water infrastructure in the North, and it’s critical that NQ provides full and accurate data fora the business case.”

The confidential survey asks participants to identify their location, current and future potential crops, how much water they are using now and how much they think they might need in the future.

The survey also tests how demand might change under different pricing models.

The 30-minute survey will be open for a month until 30 October at:  https://consultnce.engagementhub.com.au/burdekin-falls-dam-raising-demand-stud, and in paper copies in Ayr at:

  • Burdekin Shire Council – 145 Young St.
  • Lower Burdekin Water – 112 Airdmillan Road
  • Kalamia Cane Growers – 140 Young St
  • Burdekin Canegrowers – 141 Young St
  • Pioneer Canegrowers – 142 Young St
  • Invicta Canegrowers – 54 Queen St
  • Burdekin Delta Fruit and Vegetable Growers Association Inc – 70 Railway Street
  • BRIA Irrigators Ltd – 43 Old Clare Road

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